Aetna announced Tuesday an about-face on plans to expand its presence on public healthcare exchanges. It is also re-evaluating its participation on the 15 state exchanges where it offers insurance, the company said while releasing second-quarter earnings.
“While we are pleased with our overall results, in light of updated 2016 projections for our individual products and the significant structural challenges facing the public exchanges, we intend to withdraw all of our 2017 public exchange expansion plans, and are undertaking a complete evaluation of future participation in our current 15-state footprint," Aetna CEO Mark Bertolini said in a statement.
Aetna also has partnered with Humana to sell some Medicare Advantage plans to rival Molina Healthcare in an effort to clear anti-trust obstacles to the proposed $37 billion merger between Aetna and Humana, the companies announced Tuesday.
The U.S. Justice Department is challenging the merger on the grounds that it would result in an anti-competitive environment in many healthcare markets.
Likewise, the DOJ is challenging Anthem's planned $53 billion takeover of Cigna.
Aetna's re-evaluation of its exchange business is the latest blow to the program created under the Affordable Care Act to reduce the rate of uninsured people in the country.
In April UnitedHealth, the nation's largest insurer, said that next year it would abandon all but a few exchanges after losing about $1 billion on that business in the previous two years.
Aetna's revenue and operating income grew in the second quarter at the parent and in its large healthcare segment. Aetna offers a broad line of commercial, managed care and Medicare healthcare coverage.
Healthcare operating earnings in the quarter were $771 million compared with $708 million in the prior year quarter.
Revenue was 15.2 billion for the second quarter of 2016 vs. $14.5 billion for the second quarter of 2015. The increase, the company said, was primarily due to higher premium yields and membership growth in Aetna's government business, partially offset by membership losses in Aetna's commercial Insured products.